During the August 6 episode of CNBC’s Mad Money, Jim Cramer pointed to a growing sector rotation as portfolio managers look for innovation outside the mega-cap technology space. He said:
Finally, tech had such a run that portfolio managers want exposure to other sectors of the market that still have innovation. Think of them as non- tech tech stocks. For the… Charitable Trust club, we’ve been emphasizing Eli Lilly and Johnson & Johnson. And we talked about these… I talked about them at length with Jeff Marks today at our 10:20 call. They both had terrific quarters and deserve to be bought on any weakness.
Cramer’s thesis highlights how mega-cap healthcare operators provide defensive shelter with strong dividend profiles and maintain high-growth product pipelines. Cramer further emphasized that innovation in biotechnology is driving tangible financial gains. He said:
Amgen just racked up an excellent quarter. And credit where credit’s due, time to accept that Moderna has begun to realize its stream of specialized vaccines for specific illnesses. Just last night, the company, it received FDA approval for its mRNA flu vaccine. Well, there’s a reason why the stock’s up 83% for the year.
Bristol-Myers Squibb Generates Trim Call Following Merger Rumors
Later in the August 6 episode, a caller asked Cramer about Bristol-Myers Squibb Company (NYSE:BMY) after holding the stock through recent buyout speculation. In response, Cramer remarked:
I actually, given how much that even an aggressive acquirer like AstraZeneca was willing to pay, it’s probably worth it to trim. I just don’t see as much upside. Look, it’s not an expensive stock. It has a 3.9% yield, but there are others that are better, including J&J, which I like much more.
A recent Financial Times report indicates that AstraZeneca held preliminary discussions regarding a potential purchase of US-based Bristol Myers Squibb. However, some believe that this is unlikely to happen and do not view it in a positive light. RBC analyst Trung Huynh noted that agreeing on valuation will be difficult given AstraZeneca’s strong standalone growth target and BMY’s patent cliff headwinds. Moreover, the firm believes that it needs to see more developments “before deeming a deal likely.”
Additionally, TD Cowen analyst Steve Scala showed a negative sentiment toward the deal, warning that BMY’s severe patent risks would dilute AstraZeneca’s long-term sales growth. The analyst noted that he sees short-term tailwinds due to synergies but showed less confidence for the longer-term.
Smart Money Positioning and Valuation Multiples Across Major Pharma Plays
According to Insider Monkey’s database, Eli Lilly and Company (NYSE:LLY) and Johnson & Johnson (NYSE:JNJ) hold the largest hedge fund backing among the group. Eli Lilly led during the first quarter of 2026 with 132 hedge fund positions, compared to 137 in the fourth quarter of 2025. Johnson & Johnson saw its hedge fund interest increase to 113 hedge funds in Q1 2026, up from 104 in the prior quarter. Meanwhile, Bristol-Myers Squibb Company (NYSE:BMY) tracked 83 hedge fund holders, rising from 82, while Amgen Inc. (NASDAQ:AMGN) recorded 65 hedge fund positions in Q1 2026, down from 70 in Q4 2025.
Forward earnings ratios across the group show a wide split between premium growth plays and deeply discounted value names. Eli Lilly has the highest multiple in the group, trading at a forward price-to-earnings ratio of around 32.7x due to its market-leading GLP-1 franchise. Johnson & Johnson trades at 22.27x forward earnings, as it offers steady stability and balance sheet security. Amgen sits at 18.35x forward earnings, giving value-oriented investors a lower entry point into large-cap biotech execution. Bristol Myers Squibb remains the primary value play at a low forward P/E of 9.38x. However, limited growth catalysts support Cramer’s recommendation to trim.
Short interest across all four names stays low. Eli Lilly and Company (NYSE:LLY) carries a short interest of 1.15% of float, closely followed by Johnson & Johnson (NYSE:JNJ) at 1.27%. Bristol-Myers Squibb Company (NYSE:BMY) stands at 2.20% of float, while Amgen Inc. (NASDAQ:AMGN) carries a short interest of 2.38%.
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